Governor’s Criticism Coincides With Tempered Stand by Court

SAN FRANCISCO —  Gov. George Deukmejian’s charge that the California Supreme Court is anti-business comes at a time when the court may be tempering its stand on issues that most affect business, according to many lawyers who deal frequently with the court.

“It’s not the plaintiffs’ court it was when I started 25 years ago,” said Ventura lawyer Edward Lascher, who often represents plaintiffs suing businesses. A person suing a business, he said, can no longer bank on a victory in the high court.

Deukmejian raised the issue a week and a half ago by calling on business leaders to “make the connection” between what he described as the court’s anti-business rulings and the November, 1986, election, when five justices face voters.

Four of the justices--Chief Justice Rose Elizabeth Bird and Associate Justices Stanley Mosk, Joseph Grodin and Cruz Reynoso--are generally viewed as liberals.

Seeking to buttress his charge, Deukmejian last week released a list of 31 high court cases that, he said, allowed added taxes on business, made it easier to win large judgments against business, damaged landlords, forced business to pay added compensation to injured employees and made it easier for labor to picket companies.

Several legal experts criticized the list, arguing that although Deukmejian could have found ammunition--and in some cases did--to support his claim that the court is anti-business, many of the 31 cases he cited turned out to be blank shells.

Some said the list contained misstatements. Others said many of the cases were correctly decided and merely upheld statutes passed by the Legislature. A legal scholar said the list is “so diverse and rather muddled that it doesn’t establish an intent to damage business.”

“I could spend a half hour and find a number of decisions that are pro-business,” said Robert Seligson, a San Francisco lawyer who has represented insurance companies before the high court.

Pointing out that several cases involved injured workers, Seligson said, “To say that the court is being protective of the rights of people who have lost their bodies means that the court is anti-business--I don’t see how you can make that jump.”

The list included 19 cases in which Reynoso did not participate and 22 decided without Grodin. Both joined the court in 1982.

At least three cases were decided without Bird. Although she voted with the liberal majority in most of the 31 cases cited, she wrote only two of the majority opinions.

Mosk wrote 10 of the majority opinions. He dissented in half a dozen others, including two major rent control cases in which, Deukmejian charged, the court had damaged landlords, and two other cases that barred as discriminatory adult-only apartment houses and condominium complexes.

Fourteen of the majority opinions were written by judges who are no longer on the court, including seven by Justice Mathew Tobriner, for years one of the court’s most influential and liberal members. Tobriner, who wrote some of the most far-reaching cases on the list, died in 1982. Two other lead opinions were authored by conservative Justice Frank Richardson, who joined the Reagan Administration in 1983. Also, Deukmejian’s sole appointee, Malcolm M. Lucas, the fifth justice on the 1986 ballot, joined the court in one of the opinions that Deukmejian said was anti-business.

Vance Raye, Deukmejian’s legal affairs secretary, said the governor’s staff did not compile the list or check its accuracy.

“It is not our list,” Raye said, adding that it was provided by “various business groups” upon request of the governor’s office, which was responding to requests that Deukmejian come up with cases to back his charge.

“There is a perception that the Supreme Court is hostile to business, and this list would tend to support that,” Raye said.

That view does have support among many defense lawyers in civil cases.

Gideon Kanner, another appellate lawyer, said the court is particularly hard on the insurance industry, land developers and landlords, although he did not endorse Deukmejian’s call for business to unseat the judges.

“If you’re in those camps, it certainly is not a pleasant or hospitable experience (to appear before the court),” Kanner said. “If you have to bet, bet for the plaintiff.”

But other lawyers said the court appears to be less willing to expand the law at the expense of private enterprise than it was even five years ago.

“It’s not like it was before,” said Leonard Sachs, who for several years filed friend-of-the-court briefs for the California Trial Lawyers Assn., which represents injured plaintiffs--often against business--in lawsuits.

Between 1968 and 1975, Sachs said, he worked on 41 such cases and lost only four. Another association member, Glen T. Bashore, said a review of more recent association cases shows that it lost 12 of 23 cases decided between 1980 and 1984.

It’s not that the court has become Draconian, Lascher noted. But with the loss of Tobriner, he said, an injured party faces longer odds.

One surprise on the court was Grodin. He was a law clerk for Tobriner, and many lawyers assumed that he would follow Tobriner by being a strong liberal. He has proved to be hesitant to vote for major expansions of the law, joining with Justice Otto Kaus in what appears to be an emerging centrist view.

The most striking examples were three medical malpractice rulings issued during the last year. They limited doctors’ exposure to medical malpractice suits and capped the amount that lawyers can charge in such suits. The majority opinion in each was written by Kaus, and Grodin cast a key vote in each.

Complex Case

Another case cited by Lascher, Seligson and others to support the position that the court is less willing to expand the law was Seaman’s Direct Buying Service vs. Standard Oil Co. The malpractice cases did not appear on Deukmejian’s list; the Seaman’s case did.

Deukmejian’s list appeared to overstate the effect of the case by saying, “Court created tort liability for breach of contract.”

The ruling was one of the most complex issued in 1984, raising one of the most delicate issues to reach the court in years. In breach of contract cases, the tradition is that the damage award against a party that breaks a contract cannot be more than the value of the contract. Damages often become astronomical when punitive, or tort, damages are awarded.

In the Seaman’s case, however, the court specifically declined to extend tort damages to basic breach of contract cases, except in a very limited area. That is when a party to a contract denies in bad faith that the contract existed.

The court said that to allow tort awards in all contract cases would be “to move into largely uncharted and potentially dangerous waters” and that “it is wise to proceed with caution.”

Misleading Description

That was not the only case on the list in which the description was misleading. The governor criticized the court for ruling in 1983 that a “phone company could be liable for injuries suffered in one of its phone booths, even though the injuries were caused by a reckless driver who ran into the booth.”

One fact left out of the description of the case was that the door to the phone booth jammed, preventing the victim’s escape. Even the sole dissenter in the case concluded, “The sticky door, if it existed, increased plaintiff’s danger by frustrating effective use of his own self-protection.”

In a few instances, the list of cases appears to have misstated what the court did. In a 1982 case, for example, the governor’s list said the court “allowed local government to increase business taxes with a vote of the people.”

The opinion itself says that the court upheld San Francisco’s extension of expiring taxes on gross receipts and payrolls after voters approved the taxes by a 53% majority. The issue, which stemmed from the Proposition 13 tax limitation measure in 1978, was whether a two-thirds vote of the electorate was needed to adopt a “special tax.”

At the same time, the list distributed by the governor contained solid examples of cases that could be viewed as increasing the cost of doing business in this state and that were widely criticized by academics.

Blood Pressure Case

The court concluded in a 1982 case on the governor’s list that high blood pressure is a physical handicap and that, therefore, employers could not, under anti-discrimination laws, refuse to hire a person with high blood pressure.

In a law review article, Stephen Barnett, law professor at the University of California, Berkeley, concluded that the court gave too broad a definition to the term “handicap.” The potential, he wrote, is that “almost any medical condition may be considered a physical handicap--contrary to what the Legislature apparently intended in limiting its definition of medical condition.”

Barnett and other scholars also were critical of the case in which the high court, in one of Tobriner’s final opinions, concluded that adult-only apartment complexes are discriminatory. That case also appeared on the governor’s list.

The professor viewed the ruling as an expansive interpretation of anti-discrimination law, one that would have been better dealt with by the Legislature.

The governor’s list omitted several other cases that might be viewed as “anti-business.” One 1982 case not on the list struck down a company’s policy that before an employee received paid vacation time, he had to be on the job for one year.

‘Problematic, Surprising’

In an opinion by Bird, the court concluded that employees are entitled to some paid vacation time, even if they quit before working on the job for a year.

“The court at the end of its opinion invoked principles of equity and justice,” Barnett wrote. “Yet while the decision may seem economically fair, the court’s reading of the statute was both problematic and surprising.

“It presents a question of equity and justice for employers, particularly in view of the ruling of the state Department of Industrial Relations that (the case) will be applied retroactively for up to four years.”